Friday, September 08, 2006

2005 Bankruptcy Law Makes Charitable Giving Difficult For Debtors

A press release from the National Association of Consumer Bankruptcy Attorneys describes a recent decision by a federal bankruptcy judge in New York that makes it difficult for individuals going through Chapter 13 bankruptcy proceedings to meet religious obligations to tithe. In In re: Diagostino and Diagostino, Case No. 06-10384, (Bkrptcy., ND NY, Aug. 28, 2006), a bankruptcy judge interpreted Sec. 102 of the Bankruptcy Abuse Prevention and Consumer Protection Act of 2005 to preclude the inclusion of tithes to a church or other charitable donations as "reasonably necessary" expenses. So unsecured creditors must be paid off under the court-approved repayment plan before charitable contributions can be made. The only exceptions are for situations such as a minister whose employment contract requires tithing. An article in today's Deseret (UT) News points ot that this decision undercuts the Religious Liberty and Charitable Donation Protection Act of 1998 that allowed tithing by those going through bankruptcy. [Thanks to Ross Heckman via Religionlaw for the information.]